Building Value in iGaming: M&A, Capital Strategy and the Road to Exit

How does the investment market view your iGaming business and what creates value?

In this episode of Connected with Pragmatic Solutions, our CEO Ashley Lang speaks with Crispin Nieboer, Partner at Tekkorp Capital, about how iGaming operators and B2B providers can build, protect, and realise value.

From early capital structure decisions to navigating exits in a market shaped by regulatory uncertainty, the conversation draws on Crispin's direct experience as a founder, a CEO of a major online division, and an M&A advisor to some of the industry's most consequential deals.

Start the conversation earlier than feels comfortable 

One of the most consistent mistakes founders make is waiting until external pressure forces a transaction. Crispin's view, shaped by his own experience running a poker business for nearly a decade, is that the optimal window for a sale is when growth is strong and the narrative is compelling. By the time a business is under financial or regulatory strain, options narrow and leverage shifts to the buyer.

Beyond timing, the structural issues that derail deals are rarely about price. They tend to be operational and legal: a tax liability that was never modelled, a compliance infrastructure that does not hold up to due diligence, a market concentration that turns into a negotiating liability. These are problems that take years to address. Founders who engage M&A advisors before they need to are consistently better positioned when the time comes. 

Aligning founders and investors from the outset

The tension between a founder's product vision and an investor's return timeline is one of the more common sources of dysfunction in iGaming businesses. Crispin's advice is to address it structurally at the point of investment, not reactively when it becomes a conflict.

The practical tools include staged capital raises, convertible instruments and SAFEs that defer valuation until proof points are established, and milestone-based narratives that keep investors focused on cohort performance rather than headline revenue. The underlying principle is control of the story. Founders who can demonstrate customer acquisition economics, market-by-market repeatability, and a defensible competitive position are in a far stronger position when they do choose to raise or sell. 

What buyers are actually evaluating

When buyers assess an iGaming business, regulation is the primary lens. This means not just which markets the business operates in, but the direction of travel in each jurisdiction, the quality of the compliance function, and whether the business looks structurally sound to a regulated acquirer. A business that has been cutting corners on AML, KYC, or responsible gaming controls is not just a legal risk. It is a valuation risk and, increasingly, a deal-breaker.

Beyond regulation, sophisticated buyers focus on quality of earnings. That means understanding whether revenues are sustainable: how reliant the business is on a small number of VIP customers, whether growth has been driven by aggressive bonusing, and how concentrated market exposure is. The Flutter acquisition of Tombola in 2022 is a useful reference point. The rationale was explicitly about acquiring a recreational, long-retention customer base, the kind of earnings quality that both regulators and investors now actively prefer.

Operators building on robust platform infrastructure, including strong back-office tooling for compliance and player management, are better positioned to demonstrate this quality to acquirers.

Crypto, emerging models, and the question of enterprise value

The conversation covers the growing presence of crypto-native operators and the strategic question of whether they represent acquirable value. Crispin's assessment is measured: these businesses often have strong UX, young customer bases, and genuine technology capability, but the buyer pool is extremely limited because of the absence of regulated infrastructure. AML and KYC gaps, combined with dependency on banking relationships that can be severed, make them high-risk assets.

What is more interesting is the direction some of these businesses are now taking. Stake's moves into regulated markets in Italy and Denmark are an early indicator of a possible shift: crypto-native operators using their cash flow and technology capability to build regulated licences. The same analytical framework applies to emerging models such as prediction markets, sweepstakes, and DFS variants. Investor appetite is constrained by regulatory uncertainty, but the first businesses to establish durable positions in these categories, either through organic build or strategic acquisition, will be well placed.

When M&A makes more sense than organic growth

Organic growth works well within an existing model and geography. When operators want to enter new continents, new verticals, or very different regulatory environments, M&A often offers a faster and more reliable route: an existing team, local regulatory relationships, marketing infrastructure, and sometimes a brand. The Betano Kaizen example in the conversation is a useful counterpoint. They expanded from 7 to 18 markets without M&A, an unusual achievement. But it required an exceptional management team and favourable conditions. Most operators considering the same trajectory will find that targeted acquisitions reduce execution risk considerably.

The markets Crispin identifies as currently attractive for B2C investment share common characteristics: near-term regulation, tax rates that allow viable margins, and scale potential. Finland, New Zealand, and Ontario are cited explicitly. France and Poland carry option value if casino regulation is extended. Africa offers opportunity but requires careful navigation of the audit and management quality issues that affect mid-stage businesses in those markets.

What goes wrong, and why

The most instructive part of the conversation is the discussion of deal failure. The assumption that overpayment is the primary risk is largely wrong. More commonly, acquisitions fail because the strategic rationale was not clearly communicated, key people left, or the integration model destroyed the qualities that made the target worth buying in the first place.

The Penn and Barstool transaction is the clearest recent example: assumptions about audience conversion that were not grounded in evidence, leading to a write-down and a sale at a nominal price. The counterexample, Paddy Power Betfair's early stake in FanDuel, demonstrates what well-reasoned strategic conviction and disciplined execution can produce. The acquirer's job is to identify what is genuinely valuable in the business being bought, and then protect it through the integration.

Longer earnout structures are one response to this: keeping founders engaged and incentivised over three to five years rather than allowing a clean exit that removes the people who created the value in the first place.

5 key takeaways

• Begin preparing for a transaction well before one is imminent.

• Control the investor narrative around cohort performance and market-by-market proof points.

• Regulatory direction of travel is as important as current market position.

• Quality of earnings, including customer mix, market concentration, and bonus dependency, is scrutinised as heavily as revenue growth.

• Acquisition success depends more on people retention and cultural continuity than on the price negotiated at closing.

Watch the full episode here